Communist Vietnam will become WTO's 150th member

GENEVA, Nov 7 (Reuters) Communist Vietnam, one of the world's fastest growing economies, won formal approval from the World Trade Organisation on Tuesday to become its 150th member by the end of the year.

The Southeast Asian country of 82 million people will officially join the WTO, which sets the rules for global trade, 30 days after its National Assembly ratifies the accords.

''Today is a memorable day in the process of the international economic integration of Vietnam,'' Deputy Prime Minister Pham Gia Khiem told reporters after the WTO's General Council approved a deal struck last month by a working party.

Vietnam, an exporter of textiles, seafood, coffee and furniture, negotiated to join the WTO for 12 years while its once state-controlled economy underwent deep reform.

Although its economy is relatively small, with gross domestic product of billion this year, it is the latest of Asia's economic success stories and has become a big favourite of the foreign aid and investment communities.

Average economic growth of 7.4 percent over the past five years is higher than that of any other Asian country except China, its Communist neighbour whose output has soared since it joined the WTO in late 2001.

WTO Director-General Pascal Lamy called the deal ''fairly balanced'' and said it would benefit Vietnam. ''Those who are members compete on a more level playing field,'' he said when asked what advantages membership would bring Hanoi.

WORLD WILL BENEFIT But joining the WTO will not protect it from anti-dumping actions by rich nations, such as the extra duties imposed by the European Union on its shoes and by the United States on its shrimp exports.

The United States, which waged war against communist North Vietnam and its guerrilla supporters in the south in the 1960s and early 1970s before they took over the whole country, praised Hanoi's economic reforms.

''The world will benefit from the inclusion of this rapidly-growing, dynamic economy in the rules-based trading system,'' U.S. Trade Representative Susan Schwab said in a statement.

The deal includes the tariffs and quotas Vietnam will apply to foreign imports. It also specifies services such as banking, insurance and telecommunications that Vietnam will open to outside providers and spells out limits to the restrictions it can impose on foreign ownership of firms inside the country.

When Vietnam's neighbour Cambodia joined the WTO in 2004 it did so in the face of warnings from regional economists that it had conceded too much.

Lamy acknowledged that those joining the WTO now were being forced to pay a higher price. ''That is the reality,'' he told journalists.

Vietnam's accession will leave only a handful of important economies outside the WTO, including Russia and Ukraine, which are both negotiating entry, and Iran.

Reuters AKJ GC2303